As Russia curtails its gas deliveries to Europe, several classes of European manufacturers are confronting shortages in the critical fuel they need to perform their business.

Starting Monday the Nord Stream 1 pipeline will shut down, as part of a 10 day long annual maintenance period. Normally such a maintenance shutdown would be seen as normal, and it would be expected in 10 days, gas delivery would resume at full capacity. However these times are anything but normal.

Moscow had already cut gas deliveries by 40%. European nations accused Russia of doing so for political reasons, as punishment for their support of Ukraine in its war with Russia. However Moscow asserted the slowdown was due to safety concerns, produced by Russia’s inability to get a critical turbine returned from Canada that was needed for routine maintenance.

On Saturday, Canada finally relented, saying it would sign a waiver allowing the return of the turbine to Germany, so they could forward it on to Russia. Berlin says it will return the turbine to Russia, however it says the turbine has only been used as an excuse, and it expects after returning the turbine to Russia, the constraints on its gas supply will remain. Germany has even speculated the pipeline may remain fully shut down, even after the return of the turbine and the completion of maintenance.

Although Europe has enough gas now to supply its manufacturing sectors, the danger that is approaching comes with winter. Europe needs to fill up its reserve storage facilities with gas now, so that during the winter, combining imports with drawdowns on storage, it will have enough gas to supply both its manufacturers and its populace with the gas they will require for basic heating.

The difficulty now is having enough gas beyond what is used in manufacturing to fill up its storage facilities in preparation for winter. Once winter arrives the question will be if there will be enough gas to both heat homes, and allow the continuation of manufacturing activities. Russia historically has supplied 40% of Europe’s gas.

For now manufacturers are beginning to plan for the worst case scenario, even as they struggle with the rising prices of energy. A megawatt hour of gas cost 7 euros three years ago. The price has since risen to 175 euros, and analysts say it may rise as high as 250 euros.

Chemical manufacturers which use natural gas for the production of precursor chemicals are looking to import precursors from regions outside Europe where natural gas is not in short supply.

Svein Tore Holsether, chief executive of Yara International AS A, the world’s largest fertilizer producer said, “There are no easy solutions if we get into a curtailment situation.” 

With 15 manufacturing facilities across Europe, Yara uses natural gas to synthesize ammonia, which it then uses to produce nitrogen fertilizer. Several times over the last year, as the price of natural gas spiked, the company has imported ammonia from other regions where the price was lower. However there are limits to that strategy.

Mr. Holsether noted, “Ammonia-producing assets aren’t really designed to be ramped up and down with fluctuating prices.”

Meanwhile, Hambug based, Aurubis AG, which produces copper, has a long-term plan to convert to electricity usage in its manufacturing processes, but for now it is dependent on gas. The company projects it will take a year to switch from gas, and in the interim if there is no gas, production will have to cease.

European glassmaker Ritzenhoff AG will be hit particularly hard by any cutoff of natural gas supplies. Most of the energy in glassmaking comes from gas, which powers the furnaces which keep the glass melted at temperatures of over 2700 degrees Fahrenheit.

Axel Drösser, CEO of Ritzenhoff said, “Natural gas cannot be substituted here. If there is no gas, the ovens have to be switched off and production comes to a standstill… an ad hoc substitution of gas in glass production is not possible with the given infrastructure” He notes if left idle, the tanks which hold the molten glass can be damaged.

Meanwhile, Russian President Vladimir Putin is clearly in control, as he warns the west against imposing further sanctions against Russia. President Putin, at a recent government meeting said, “Sanctions restrictions against Russia cause much more damage to precisely those countries that impose them. Further use of the sanctions policy could lead to even more severe, even catastrophic, consequences in the global energy market.”